The National Statistics and Census Institute (INDEC) has revealed a drop in economic activity of 1.2 percent during August, compared to the same month last year.

Compared to July 2014, the decline is slightly smaller at 0.9 percent, the state statistics bureau explained today upon releasing the latest figures from their Monthly Economic Activity Estimator. It is the first time in four months that the INDEC data has shown negative growth.

For the majority of economic analysts, the main reason for August's drop owes to the restrictions on foreign currency, which have caused serious problems in purchasing necessary parts from overseas.

The economy had grown 0.9 percent in the first two months of 2014, but in March activity fell by the same amount, followed by negative figures in April (0.5%) and May (0.2%).

Indicators showed activity picked up in June and July by 0.7 and 0.1 percent respectively, before August's plummeting numbers represented the biggest interannual drop since July 2009. A change in INDEC's measuring methodology at the start of the current year, however, means this is not an exact comparison.